Berlin: Film/TV Distributors Call for China to Lift Trade Barriers to Hollywood

Illustration by: Lars Leetaru

The IFTA wants China to honor its commitments on trade to make a level playing pitch for international TV and movies.

The Independent Film & Television Alliance, a group of international distributors that puts on the annual American Film Market, has called on China to honor the terms of a 2012 trade deal and allow Hollywood films to compete on a transparent basis.

"In the long-term I'm optimistic that China will be one of the major international stocks, but at this point what we've been stunned by is how slow they've been to lift trade barriers and abide by international trade agreements to which they have committed," said Jean Prewitt, president and CEO of the Independent Film & Television Alliance, at the Berlin Film Festival.

"We'd like to see them implement fully the U.S.-China Film Agreement, introduce competition on theatrical distribution and make their processes for importation more transparent," Prewitt said. 

China has adopted international trade rules, such as the World Trade Organization’s (WTO) resolution saying that China's monopoly system in the importation and distribution of foreign films breached China’s trading rights commitments.

In February 2012, the Chinese government expanded the quota of overseas movies from around 20 to 34 per year on a revenue-share basis, including enhanced format movies.

The move was signed by then-Vice President, and current supreme leader, Xi Jinping, and U.S. Vice President Joe Biden and was seen as a giant step forward in relations between the world's biggest and second-biggest film markets.

Box office in China surged 36 percent in 2014, said Zhang Hongsen, the head of the film bureau under the State Administration of Press, Publication, Radio, Film and Television (SAPPRFT).

While homegrown films accounted for 54.5 percent of the box office, the top 10 was dominated by foreign movies.

The biggest movie of the year was Michael Bay's Transformers: Age of Extinction, which took $320 million, with specially introduced Chinese elements aimed at boosting the markets.

However, Hollywood studios feel China is still a difficult market in which to perform.

"China is the second-largest market in the world. The local infrastructure has become very strong, and it's extremely important in terms of distributing films, and we'd like them to step up and take their place with the major countries and participate fully not only producing but also in importing the strong films from around the world," Prewitt said in an interview that also included IFTA's general counsel Susan Cleary.

"We independent filmmakers are at a terrible disadvantage, in part because we look to local distributors to perform all the services in terms of marketing, servicing the film, to building the audience. We don't know the audience there, mostly, and don't have an ownership structure to monitor the local market," she said.

China favored films that come in through the revenue-sharing quota, which not only gives preference to large studios, but also distorts what is brought into the Chinese marketplace. There certainly have been a lot of limitations imposed on the independent sector and foreign importers.

She said that recent rules to curb foreign TV content online, and proposals to expand that to film as revealed in THR this week, would hit independents, which rely on TV and VOD as it's emerged.

"China's announcements that it is going to clamp down on that sector — you may well be closing the door to smaller countries," Prewitt said.